BACK

Credit Scores and Reports

Learn the ABCs of credit scores, credit scoring

Summary

Credit scores are intriciate, but increasingly important for consumers to know about. We’ll break down the credit scoring basics.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

If you are completely confused by the concept of credit scores, you are not alone. In fact, you are probably part of the majority that finds themselves befuddled by how credit bureaus compile, calculate and use these scores to determine your creditworthiness, often with the input of credit card companies and other creditors.

Your keys to getting into the 700-plus credit score club

Having a solid credit history with a credit score over 700 will open doors to money-saving opportunities — from low-interest mortgages and loans to lower APR credit cards, better insurance rates and even jobs. Here are a slew of tips that can help get you and keep you in the get and keep a great credit score.

A credit score is simply a numeric value that has been assigned to your historical credit habits. The original company that pioneered the creation of this score is called Fair Isaac Corp., which forms the acronym “FICO.”

The combination of credit bureaus, credit card issuers and massive databases that warehouse consumer data means that virtually every American now has a credit score. This score is vital to determining whether a person can access low-cost credit, something more expensive or is even eligible to get new credit at all.

In general, the higher the score, the lower the interest rate a person will have to pay on a new credit card or consumer loan. Conversely, a lower score will translate to higher interest and less desirable terms.

FICO-based credit scores can range from a low of 300 all the way up to 850. Lenders generally segment scores into six ranges for the purpose of determining to whom they will make credit offers and at what terms. Anyone below the sixth tier can usually only obtain credit from a subprime credit card lender at very high interest rates. Listed below are the six average credit score ranges used by many of the nation’s largest credit card, mortgage and auto lenders:

  • 720 – 850
  • 700 – 719
  • 675 – 699
  • 620 – 674
  • 560 – 619
  • 500 – 559

Individual banks solely determine the credit terms that they offer to each FICO score tier, but in general the best offers go to the top tier. Many of the top credit card issuers specialize in super-prime lending, meaning they target consumers with these tier 1 credit scores. However, competition among the largest issuers could allow those in lower tiers to be considered for leading offers, such as those that feature 0 percent APR introductory rates.

What’s up next?

In Credit Scores and Reports

Bankruptcy filings, state by state, 2005-2010

Interactive map shows rate of each state’s bankruptcy filings, and how the pace fell off a cliff in 2005, then rebounded.

Published: October 10, 2008

See more stories
Credit Card Rate Report Updated: October 16th, 2019
Business
15.18%
Airline
17.11%
Cash Back
17.25%
Reward
17.13%
Student
17.29%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.